7 Growth Stocks on Sale

What's your investment style? Sooner or later, all investors are faced with the challenge of having to answer this pretty loaded question. Are you a Rule Maker or a Rule Breaker? A grow-getter or a value-seeker? A foolish speculator or a Foolish investor?

Although it's always good to clarify our general tolerance for risk-taking, we should never forget two important things:

1. Growth and value investing are joined at the hip, and
2. The most awesome growth stocks are also undervalued stocks.

The best of both worlds
Successful investing isn't simply about buying stocks with the lowest P/E ratios, or the ones with the most spectacular growth rates. After all, treacherous value traps and growth traps lurk around every corner of the market. Instead, the key to investing is putting your money on the most attractive risk/reward propositions that Mr. Market has to offer.

Buying growing companies at discounted prices is probably the best method by which to do that. This approach earns you the double benefit of buying a stock that trades below its fair value today, and owning a business that's well positioned to grow that value tomorrow.

We've got these stocks PEG-ged
So, with our hearts set on growth -- but our brains stubbornly fixated on getting a fair price for it -- here are seven more reasonably priced, fast-growing favorites of our Motley Fool CAPS community.

In addition to having five-year estimated growth rates above 20% and PEG ratios below one, these stocks have received a four- or five-star rating from our pool of more than 27,000 individual and professional investors.

As always, don't take these stocks as well-formulated investment recommendations, but rather as candidates for further research. Regardless of which investment approach you take, due diligence is the thread that binds all superior returns.   

To get you started, though, here's a brief summary of one stock that caught my attention.  

Road to rags or riches?
In our CAPS database, you'll find tons of companies just beginning to pave the road for future earnings. But Astec Industries, a provider of road-building equipment like hot-asphalt mixers and heaters, is no stranger to paving roads at a profit. The Tennessee-based company has benefited from the government's huge need to improve the country's road systems, and the numbers only indicate that there's plenty of road left ahead.   

The call to rebuild America's infrastructure is one that, in my opinion, Congress has actually taken seriously. Fools need look no further than the $286 billion federal transportation bill to witness evidence of that. Astec, which manufactures more than 170 products used in the process of highway construction, looks like a fairly reasonable way to play the government's significant increase in spending. I'm not a huge fan of investing based on large industry trends, but it's tough to overlook the $242.5 million backlog that Astec is currently sitting on.

With a debt-free balance sheet, ongoing investment in the expansion of the nation's roads, and a very recent thumbs-up from CAPS All-Star firm Janco Partners, I'd say Astec looks like a good candidate to stay on the market-beating path. Here are three more CAPS players with their eyes clearly focused on the road:

• CAPS All-Star JMacAttack also relates Astec's growth prospects with the current price but focuses on just the year ahead instead: "Huge revenue and earnings growth. Forward P/E of 16 shows the real value of this stock play."
• idoxlr8, on the other hand, takes a more general approach to gauging Astec's investment potential: "The roads in this country are falling apart. The roads simply are not keeping up with the traffic. This is a company that is poised to profit from this problem."
• Finally, to illustrate some of the insightful calls you can find on CAPS, here's a pitch that All-Star Uresh made in September 2006. The stock is up almost 75% since it was written: "Bush Administration infrastructure bill will keep things in motion. Rebuilding needs equipment and ASTE is one of the prominent suppliers."

Get growin', Fool
So, does buying high-growth companies at decent prices make complete sense to you? More appropriately, how could it not? Join our Motley Fool CAPS community to get more analysis on the above ideas, create your own list of fairly priced growers, or even weigh in with a sharp opinion of your own.

Within moments, you'll have access to stock ideas that can provide the best of both the value and the growth investing worlds. Oh, and it's absolutely free. Now that's what I call a reasonable price.  

Make seven picks on CAPS by April 24, and we'll send you a free copy of The Motley Fool Five Star Report. Inside, you'll discover how to use CAPS as a research tool, and you will receive a recommended five-star CAPS pick poised to beat the market for the next decade or more -- one that you can easily translate into profits for your real-world portfolio. Click here to get started now!

Suntech Power is a Rule Breakers recommendation. optionsXpress Holdings is a Stock Advisor pick.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool has a disclosure policy.